Skip the bank, buy a house with cash - WMC Action News 5 - Memphis, Tennessee

Skip the bank, buy a house with cash

An increasing number of people are paying for real estate with cash, making a surprising uptick in a market that was all but flattened two years ago.

Marc Wurst and his fiancée Mary Nappi are looking at their twenty sixth house in search for their first time.

They'll be paying for it in cash, taking advantage of the market's low housing prices.

"This is a great time to buy houses. Because they are so much less than what they were at, even four years ago," Wurst said.

From coast to coast, cash sales are up.

According to the National Association of Realtors, 32 percent of all properties purchased in January were cash, compared to 26 percent in January of last year.

Columbia University real Estate Professor Christopher Mayor said that people were taking advantage of what they say as good opportunities along with difficulty financing.

"I think the cash purchases in the market are a function of where we are in the cycle, the challenge of getting financing and what some people perceive as real opportunities to purchase properties."

Many are investors who fix up condos and houses and then sell or rent them out.

But for first-time home buyers like Wurst and Nappi, cash means not having to worry about loans and credit for a mortgage.

"It gives you a distinct advantage over other buyers. And can probably get you a discount on a house, especially with as many houses as you see that are on the verge of short sales, where the people haven't quite given over the bank yet, and they need to be out. I don't need 90 days to get a mortgage approval, it's cash," Mayer said.

And that may just help the battered real estate market get back on its feet, he said.

"It's going to be a really slow road to picking up again so people coming into the market and having confidence that we've hit a floor and they're willing to pay for properties with cash, is a positive."

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